The decline of Q1 market value of small and medium-sized computer companies is much smaller than that of large market value companies. In Q1 2022, the computer (CITIC) index fell by 19.12%. Among them, the average decline in Q1 of large market capitalization companies (the market value is more than 40 billion yuan by March 31, 2022) was 24.50%, and Dawning Information Industry Co.Ltd(603019) is the only large market capitalization company to rise, with an increase of 7.69% in Q1 in 2022. Small and medium-sized companies with market value (market value less than 20 billion yuan as of March 31, 2022) had an average decline of 8.16% in Q1 in 2022, which was only about 1 / 3 of the average decline of large market value companies. We believe that the essential reason is that from 18 to 21 years, large computer market companies have obvious excess returns and generally high valuations.
The valuation of small and medium-sized companies has been at the bottom level, and the valuation of Baima company with large market value corresponding to next year is very attractive. From the perspective of valuation, the valuation of small and medium-sized computer companies has gradually reached the bottom. For example, as of April 9, 2022, corresponding to the consensus expectation of wind of PE in 2022, the new point software is 17 times, Yusys Technologies Co.Ltd(300674) 23 times, Guangzhou Sie Consulting Co.Ltd(300687) 26 times and Xgd Inc(300130) 22 times. We judge that the valuation of small and medium-sized computer companies has been at the bottom level. As for Baima company with large market value, as of April 9, 2022, corresponding to the consensus expectation of wind of PE in 2023, Iflytek Co.Ltd(002230) is 32 times, Hundsun Technologies Inc(600570) is 29 times, Dawning Information Industry Co.Ltd(603019) is 21 times, Thunder Software Technology Co.Ltd(300496) is 32 times, Glodon Company Limited(002410) is 46 times, Beijing Kingsoft Office Software Inc(688111) is 44 times. We believe that the large market value of computer white horse company is very attractive corresponding to the valuation level of next year.
It is optimistic about sub industries such as industry information innovation, financial technology, industrial software and national defense informatization. In the 14th five year plan for digital economy development issued by the State Council, the word “security” appeared 48 times, and the development goal also includes “further strengthening the security system of digital economy”. We believe that at present, the challenges facing China’s digital security situation are increasing, the independent and controllable core technology has become the general trend, and the industry information innovation is expected to usher in an outbreak period. In this year’s government work report, Premier Li Keqiang proposed to continue to deepen national defense and military reform and strengthen national defense science and technology innovation in 2022. In addition, China’s national defense expenditure budget in 2022 was 145045 billion yuan, an increase of 7.1%. We believe that national defense informatization is still driven by policy priorities. At the same time, the growth rate of military expenditure exceeded 7%, which has laid a solid foundation for national defense informatization investment. In addition, according to the official website of the people’s Bank of China, the financial technology committee of the people’s Bank of China recently held a meeting to emphasize the need to implement the outline of the 14th five year plan in 2022, take multiple measures to promote the implementation of the fintech development plan (20222025), and promote the digital transformation of Finance with high quality. We believe that 2022 is the beginning of the new plan, and the relevant investment and support may continue to increase. On January 12, the State Council issued the notice of the 14th five year plan for the development of digital economy, proposing a quantitative target of 45% penetration of industrial Internet platforms by 2025. We believe that the industrial Internet has always been highly concerned by policies. Under specific quantitative objectives, the development of industrial Internet is expected to accelerate in the future. On the whole, we are optimistic about the development of the four sub industries of industry information innovation, financial technology, industrial software and national defense informatization in Q2.
A period of time after the release of the first quarterly report may become a better opportunity to pay attention to computer companies. According to wind, computer companies are expected to publish the first quarterly report of 2022 from April 14. We believe that although the first quarterly report of computer accounts for a low proportion of the overall performance in the computer industry, it can affect the market’s attention to the computer industry and bring the expected repair of computer companies. We judge that the period of time after the release of the first quarterly report is expected to become a better opportunity to pay attention to companies in the computer industry.
Risk tip: the demand for informatization in some subdivided fields is lower than expected.
